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Claim: E-mail compares proposed changes in taxes after the 2008 presidential election.
Example: [Collected via e-mail, June 2008]
Origins: Every
However, this example is off the mark both in its broad strokes and in its particulars. According to the Tax Policy Center's analysis of the candidates' proposed tax changes, the primary difference between them would be distributional, with Senator Obama's proposals favoring lower-income taxpayers and Senator McCain's favoring higher-income taxpayers:
McCain: The average taxpayer in every income group would see a lower tax bill, but high-income taxpayers would benefit more than everyone else.
The statements made about the candidates' proposals for changes in specific taxes (or implementation of new taxes) are also all erroneous or grossly misleading. as we note below:
Obama: High-income taxpayers would pay more in taxes, while everyone else's tax bill would be reduced. Those who benefit the
CAPITAL GAINS TAX
The statement that Senator Obama proposes instituting a 28% tax "on profit from ALL home sales" is false. Both candidates' proposals would leave intact an existing capital gains exemption for the first $500,000 per household of profit from the sale of a primary residence. Homeowners who realize a profit higher than the current exemption amount from the sale of their primary residences might pay more capital gains tax under an Obama presidency than they would now, but those instances currently constitute a very small minority of all home sales. (For the purposes of this article, the term "per household" refers to married couples who file taxes jointly.)
MCCAIN: 0% on home sales up to $500,000 per home (couples). McCain does not propose any change in existing home sales income tax. OBAMA: 28% on profit from ALL home sales The mention of Obama's imposing a 28% capital gains tax as president is also misleading. Senator Obama has indicated he would likely raise the capital gains tax rate, but he has not specified by how
Q: How do you plan to change the tax code when it comes to capital gains? How high will that
The Tax Plan Fact Sheet posted on Obama's web site says that he will "create a new top capital gains rate of 20 percent."
A: Well, you know, I haven't given a firm number. Here's my belief, that we can't go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the
DIVIDEND TAX
The notion that Senator Obama is proposing raising the tax rate on dividend income from its current 15% level to a 39.6% is unfounded. Obama has proposed taxing dividends at the same rate as capital gains, and although he hasn't yet specified a figure for the latter, he has already stated (as noted above) that he "certainly would not go above" 28%. Also, the proposed increase would only affect households with income of more than $250,000 per year (a figure that encompasses about 2% of MCCAIN: 15% (no change) OBAMA: 39.6%
INCOME TAX
This is an erroneous interpretation of federal income tax rates based on the premise that Senator McCain favors extending the temporary tax cuts instituted by the Bush administration in 2001 and 2003, while Senator Obama does not. However, both senators said they would favor extending those tax cuts; the difference is that Senator Obama said he would not favor extending the tax cuts for households with incomes of $250,000 or more per year. Since none of the tax tables listed above applies to that income level, their inclusion is irrelevant and misleading. As noted at the head of this article, taxpayers in the brackets covered by these tables would likely see a greater reduction in taxes under Senator Obama's proposals than under Senator McCain's, an outcome reflected in the Tax Policy Center's
estimate of how the average tax bill could change in 2009 under each candidate's proposals:
MCCAIN: (no changes) Single making 30K - tax $4,500 Single making 50K - tax $12,500 Single making 75K - tax $18,750 Married making 60K - tax $9,000 Married making 75K - tax $18,750 Married making 125K - tax $31,250 OBAMA: (reversion to pre-Bush tax cuts) Single making 30K - tax $8,400 Single making 50K - tax $14,000 Single making 75K - tax $23,250 Married making 60K - tax $16,800 Married making 75K - tax $21,000 Married making 125K - tax $38,750 Under Obama your taxes will more than double!
INHERITANCE TAX
Pretty much everything asserted about the inheritance tax (also referred to as "death tax" or "estate tax") in these few short MCCAIN: 0% (No change, Bush repealed this tax) OBAMA: Restore the inheritance tax In general, estate tax currently applies only to estates valued at more than Senator McCain has proposed raising the estate tax exclusion amount to
NEW TAXES BEING PROPOSED BY OBAMA
Three of these five statements are completely erroneous: Senator Obama has not proposed a tax on "homes that are more than 2,400 square feet," any "new gasoline taxes," or "new taxes on retirement accounts."
* New government taxes proposed on homes that are more than 2400 square feet * New gasoline taxes (as if gas weren't high enough already) * New taxes on natural resources consumption (heating gas, water, electricity) * New taxes on retirement accounts and last but not least.... * New taxes to pay for socialized medicine so we can receive the same level of medical care as other third-world countries!!! The phrase "taxes on natural resources consumption" presumably refers to Senator Obama's
Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary:
As for "new taxes to pay for socialized medicine," Senator Obama has proposed funding his health care plan through additional revenues generated by not extending the Bush administration's temporary tax cuts for persons making more than $250,000 per year. Whether allowing a portion of already-scheduled expiration of temporary tax cuts to take place really constitutes "new taxes" is a matter of semantics.
Last updated: 16 July 2008 This material may not be reproduced without permission. snopes and the snopes.com logo are registered service marks of snopes.com.  Sources:
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